The International Monetary Fund (IMF) said on Friday that China is transparent in reforming its exchange rate regime, and suggested that China let market forces determine allocations of resources more effectively.

"I want to really commend the Chinese authorities for the transparency on this issue (exchange rate reform)," said IMF Managing Director Rodrigo de Rato at a press conference in Singapore.

Rato said China took the right decision last year to reform its exchange rate regime.

The reform is not only in the interest of China's exchange rate regime, but also its overall economy, he said.

Meanwhile, he urged China to let market forces determine allocation of resources more effectively.

"In fact, we believe that is the big challenge for China in the next few years. How to let market forces influence credit, influence domestic demand, making people more confident in their safety nets ... will be in the interest of China," Rato said.

A more stable medium-term prospect for China's economic growth is very important for the world economy, he added.

Source: Xinhua